Whenever I talk to people who haven’t started investing, I get a few different reasons…

I don’t feel like I’ve got enough money to make a substantial investment. Investing sounds really confusing. I don’t know how I would pick my investments.

The Stash app has a response to each of those concerns…

You can start investing with as little as $5. The app is easy-to-use with strong educational content. Stash offers themed ETFs, so you can invest in areas and companies with goals and ideals that match your own.

Stash is breaking down the barriers built by traditional investing, but is it the best way to invest your money?

What is Stash Invest?

Stash Invest is a micro investing platform that teaches new investors how to start investing. Like other micro investing apps, you can invest your spare change, but what makes Stash different is that you can pick micro shares of ETFs and stocks that align with your interests and values.

This is an appealing way for new investors to start, and 86% of Stashers are first-time investors. In total, the 4 million Stash users have invested and saved over $1.8 billion.

And since the Stash app was released in 2015, it has grown to become an investing and personal finance app. With Stash, you can now invest your money, save money in a “no-hidden-fees” bank account, automate the process, and learn from rich educational content.

Stash Invest plans and pricing

Stash has three different account options, and it takes $5 to open an account and start investing with any of them. I’ll be covering the features you get with each account type further down in my Stash app review.

How to start investing with Stash

When you sign up for Stash, you’ll need to share your name and birthday, Social Security number, employment information, annual income, and net worth.

This is the same kind of information that any other investing app is going to ask for. You’ll also need to choose your risk tolerance (conservative, moderate, or aggressive). Stash will use all of this information to recommend investments.

Set regular investments with Auto-Stash

Part of Stash’s investment philosophy is that you need to invest on a regular basis, and this is easier if you automate the process. Auto-Stash gives you three different ways to routinely invest: Set Schedule, Round-Ups, and Smart-Stash.

Set Schedule

You pick how much you want to transfer into your Stash account from your funding source. Stash will save this as part of your cash balance, and then you can pick individual investments or set your account to automatically purchase them.

Round-Ups

Stash will round-up transactions from a connected debit card to the next dollar amount and invest the difference. This has become a popular feature among micro investing apps, and it works on the premise that your spare change really will add up.

Here’s an example: spend $4.37 on a latte, Stash will round that up to $5, and transfer the $0.63 difference into your Stash account. You can pick how to invest your Round-Ups once you hit $5.

Smart-Stash

This feature analyzes transactions from your linked debit card to find out how much money you can spare to invest each month. Smart-Stash then transfers that amount into your Stash Invest cash balance.

You can set a maximum transfer amount for Smart-Stash — $5, $10, or $25. Stash will not transfer more than this amount.

Do the Right Thing (companies who focus on positive environmental, social, and/or governance impact) is the Stash name for iShares MSCI USA ESG Select Fund, ticker symbol SUSA

Stash Invest isn’t full-blown values-based investing, which is when you invest in companies who exemplify your social, environmental, or governance beliefs. You may also hear it referred to as socially-responsible investing. USA Today reported that 9 out of 10 millennials are interested in this kind of investment strategy, with over 50% of millennials already investing this way.

Stash does make it a little easier to have a strategy like that, but they also help you curate a portfolio that reflects what makes you excited, from things like artificial intelligence to cannabis.

Stash retirement accounts

With the Stash app, you can set up and invest in a Roth or Traditional IRA. Stash will track your progress towards reaching the maximum IRA contribution limit — for 2020, the limit is $6,000 for anyone under 50, and $7,000 if you’re 50 or older.

Retirement investors can use Stash’s retirement calculator to get an estimate of how much you’ll need to save, use the AI-style Stash Coach to give you retirement challenges, and automate your retirement contributions with Auto-Stash.

Banking with Stash Invest

This is Stash’s branded FDIC-insured checking account, and it comes with all of Stash’s plans. This account has zero overdraft fees, monthly maintenance fees, minimum balance fees, and there is access to thousands of fee-free ATMs.

Users can also enroll in Stash’s Stock-Back program. This is a rewards program where you earn 0.125% stock when you use your Stash branded debit card to shop — Stash+ users earn 2x rewards. There are regular bonuses listed in the Stash Invest app where you can earn up to 5% back.

Here’s an example of how Stock-Back works: If you use your card to buy Starbucks, you earn 0.125% of your purchase as Starbucks (SBUX) stock. For companies that aren’t publicly traded, you can still earn a percentage of a diversified fund.

When you set up a direct deposit in your Stash banking account, Stash will deposit your paycheck two days earlier.

Learning to invest with Stash

One of the areas that Stash shines is that it teaches new investors how to invest. Next to the perceived high cost of investing, a lack of knowledge prevents a lot of new investors. The Stash investing platform actively works to break down this barrier.

This educational component is extremely important if you’re picking your own investments. Stash will make recommendations (I’ll explain this a little further down in this Stash app review), but Stash gives you much more control over where your money goes than other micro investing apps.

Easy access to important information about your investments

For each investment, you can look at the dividend yield, performance, and expense ratio for ETFs. You can also click on a button on any investment and be taken to that investment’s website where you can do even more research.

The Stash Coach

This tool is like a personal trainer for your investments. It’s a personalized financial coaching tool that will set challenges for you to test your knowledge of investment essentials, how to diversify your account, all about bonds, and setting long-term investing goals.

Stash Portfolio Builder

For investors that don’t want to pick investments on their own, the Portfolio Builder creates an instantly diverse starter portfolio for you. There are three levels: conservative, moderate, and aggressive.

You can still pick individual investments if you’re using the Portfolio Builder.

Learning center

Stash Learn is Stash’s collection of articles and how-to guides that cover topics like investment basics, national and global money news, personal finance issues, etc. Some of the most recent articles include a guide to the 2020 tax season, starting to invest in legal cannabis, and what you need to know about free credit score apps.

The cost of picking your own investments

While stocks don’t have expense ratios, ETFs do, and an expense ratio is the annual cost of investing. Say you were investing in a fund with an expense ratio of 0.44%, if you had $1,000 invested in that ETF, you pay $4.40 annual.

That doesn’t sound like a lot now, but you’re ideally going to have tens and hundreds of thousands of dollars invested — this is what makes retirement happen.

Here’s why I bring this up in my Stash app review: when you pick your own investments, you can wind up investing in funds with pretty high expense ratios. Stash’s average expense ratio is about 0.24%, but that’s marginally higher than other online brokerages like Vanguard.

There’s also some debate about the effectiveness of themed or values-based investing. And another potential downside is that because you’re less focused on growth, you can end up leaving a lot of great investments on the table, ones that might earn you more.

In the end, you’re going to have to decide if you want to make this part of your investment strategy. You can weigh up the differences and make the right choice for you.

M$M tip: Personal Capitalis the free financial app that my wife and I use to keep track of our investments and net worth. Personal Capital has robust tools that will analyze fees associated with retirement accounts, create a cash flow budget, and more. If you sign up using my exclusive M$M link, we’ll both get $20.

Is Stash safe?

Stash Invest is a registered investment advisor with the SEC, which requires that Stash follows federal regulations to protect consumers. Stash has partnered with Apex Clearing corporation to hold and protect your investments up to $500,000.

Stash is also PCI DDS compliant, meaning it’s regularly audited by an external third party to make sure that all technical controls and card data is protected.

Alternatives to Stash

Stash should be a strong contender for new investors, and it has features that are unique to Stash — themed investments and micro shares of stocks. Stash Invest also has more educational content than many other investment apps. But if you’re interested in looking at other options, here are two more M$M picks.

Acorns

Acorns is part micro investing app and part Robo-advisor. You can fund your account with Round-Ups, Found Money, and Multipliers. There are five different pre-built account types to match your risk tolerance.

Like Stash, Acorns has a three-tier price structure, from $1-$3/month, but it lacks the strong educational content you get with Stash.

Final word in my Stash app review

All in all, Stash has a really easy to use platform that makes investing interesting and approachable. All of those carefully curated ETFs show you that you can back your beliefs with cash. They have a decent amount of educational content too.

Add all of those things up and Stash is an intuitive investment app that’s good for beginners.

With automated deposits, you can get into a habit of investing.

The focus on small deposits shows you that you don’t need a ton of money to start investing.

Stash’s millennial-friendly collection of ETFs can make investing exciting.

When you get more comfortable, doing your own research and routinely making contributions, then leaving Stash for a brokerage with lower fees is going to be to your advantage. There aren’t any fees to close your account, but there is a $75 transfer fee.

About Millennial Money Man

Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.

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